Nico is 30 years old and will retire at age 65. He will receive retirement benefits, but the benefits are not going to be enough to make a comfortable retirement life for him
Nico has estimated that an additional $25,000 a year over his retirement benefits will allow him to have a satisfactory life. How much should Nico deposit today in an account paying 6 percent interest to meet his goal? Assume Nico will have 15 years of retirement.
PMT = $25,000, n = 15, r = 6%
PV(65 ) = (25,000/.06 ) × [1-1/(1.06 )15] = $242,806
FV = $242,806, n = 35, r = 6%
P(30 ) = 242,800(1.06 )-35 = 242,800(0.130 ) = $31,590
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